A structural equation model for predicting virtual enterprise and agile supply chain relation

In today's ever-changing market, global competition, technology development, customer demands, and decreases of product life cycles push logistics organizations in a supply chain (SC) to shift towards to flexible, robust, autonomy, responsive, and collaborative organization such as a virtual enterprise (VE). Internet and mobile technology support SMEs collaboration to establish VE with an inter-organizational network, virtual organization and integration based on core capabilities of partners. To survive in the competitive market, these SCs require agility and effectiveness which are obtained by forming highly dynamic VEs within supplier networks. Therefore academic and corporate interest in VE in supply chain management (SCM) has increased considerably in recent years. This paper aims to investigate the relationship between VE and agile SC (ASC) and provide further insights into the enhancement of enterprise capability and adoption of ICT and its impacts on VE in SCM. A conceptual hypothetical model is proposed to demonstrate impacts of three factors on ASC. To clarify the relationships among these, a structural equation model (SEM) is implied to examine the hypotheses based on observed data. The SEM consists of a measurement model (exploratory factor analysis-EFA and confirmatory factor analysis-CFA) and a structural model (path analysis). The results provide empirical evidence that the beneficial impacts of VE on the ASC.